A new office within the Department of Energy and Climate Change (DECC) has been formed to oversee the exploitation of shale gas by fracking and other types of unconventional oil and gas exploitation in the UK.

The announcement coincides with the launch of new controls on fracking. The only exploratory drilling operation for shale gas in the UK has been on hold after the triggering of seismic incidents by fracking activities last year.

Following reports on those incidents the new controls require:

- A prior review of seismic risk and the existence of faults before fracking begins

- A fracking plan showing how seismic risks will be addressed

- Seismic monitoring before, during and after fracking

- Requirements for fracking to cease in the event seismic activity of certain categories occurs

United Kingdom Office of Unconventional Gas and Oil -New Fracking Controls By Sebastian A. Charles and James O. Green A new office within the Department of Energy and Climate Change (DECC) has been formed to oversee the exploitation of shale gas by fracking and other types of unconventional oil and gas exploitation in the UK. The announcement coincides with the launch of new controls on fracking. The only exploratory drilling operation for shale gas in the UK has been on hold after the triggering of seismic incidents by fracking activities last year. Following reports on those incidents the new controls require: ? A prior review of seismic risk and the existence of faults before fracking begins ? A fracking plan showing how seismic risks will be addressed ? Seismic monitoring before, during and after fracking ? Requirements for fracking to cease in the event seismic activity of certain categories occurs For the first few operations DECC will engage an independent expert to observe and review operations. In addition a new study has been commissioned into the potential for greenhouse gases (specifically methane) to arise from fracking operations. The Environment Agency will lead on this climate change related issue. The Environment Agency and (in Scotland) the Scottish Environment Protection Agency, jointly with the Health and Safety Executive, will deal with permitting fracking activities, together with the traditional role of local planning authorities to deal with planning applications for related surface developments. In general these controls are welcome in that they allow the investigation of shale gas potential in the UK to resume in a way that should reduce the risk of future incidents and rebuild public confidence. The Secretary of State for Energy and Climate Change, Ed Davey, seems convinced that unconventional oil and gas exploitation can be made safe with proper controls, heralding a future for the industry in the UK, but proceeding with in his words "appropriate caution". Authors: Sebastian A. Charles sebastian.charles@klgates.com +44.(0).20.7360.8205 James O. Green james,green@klgates.com +44.(0).20.7360.8105 20 December 2012 Practice Group(s): Environmental, Land and Natural Resources Energy Infrastructure Projects and Transactions Real Estate Land Use, Planning and Zoning

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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